Boston Properties (BXP) Q4 Earnings: Is a Beat in Store?

Boston Properties, Inc.BXP is slated to report fourth quarter and 2016 results on Jan 31, 2017 after the market closes . Last quarter, the company delivered a negative surprise of 0.70%.

In the trailing four quarters, this real estate investment trust ("REIT"), which mainly owns and develops Class A office real estates in the U.S., reported an average positive surprise of 1.19%. In fact, the stock beat estimates in three out of four occasions. The company expects its fourth quarter funds from operations ("FFO") per share in the range of $1.49-$1.51.

Let's see how things are shaping up for this announcement.

Boston Properties, Inc. Price and EPS Surprise

Boston Properties, Inc. Price and EPS Surprise | Boston Properties, Inc. Quote

Why a Likely Positive Surprise?

Our proven model shows that Boston Properties is likely to beat estimates because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to beat estimates, and Boston Properties has the right mix.

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks ESP : The Earnings ESP, which represents the percentage difference between the Most Accurate Estimate of $1.51 and the Zacks Consensus Estimate of $1.50, is +0.67%. This is a meaningful and leading indicator of a likely positive surprise.

Zacks Rank : Boston Properties' Zacks Rank #3 when combined with a positive ESP makes us reasonably confident of a positive surprise this season.

Conversely, we caution against stocks with Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

What's Driving the Better-than-Expected Earnings?

Assets of Boston Properties are primarily concentrated in select high-rent, high barrier-to-entry geographic markets. Also, its strong tenant and industry base, including several bellwethers, ensures steady rental revenue growth. In fact, over the past five years, the company recorded an annual compound revenue growth rate of 10.05%. This trend is likely to have continued in the fourth quarter as well.

However, there is growth in supply of office space in the market and this remains a concern for the company. There is also a trend of increased concessions in some of the markets. Moreover, big financial players are opting for resizing of their business along with cost containment efforts, which is leading to a lesser demand for office space. Amid these, the FFO per share estimates for fourth-quarter and full-year 2016 remained unchanged over the past 30 days.

Stocks to Consider

Here are some REITs that you may want to consider as our model shows that they also have the right combination of elements to post an earnings beat this quarter:

Camden Property Trust CPT , slated to release earnings results on Feb 7, has an Earnings ESP of +0.88% and a Zacks Rank #3.

CubeSmart CUBE , slated to release earnings results on Feb 16, has an Earnings ESP of +2.70% and a Zacks Rank #3.

Ashford Hospitality Prime, Inc. AHP , slated to release earnings results on Feb 22, has an Earnings ESP of +16.67% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Note: All EPS numbers presented in this write up represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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Camden Property Trust (CPT): Free Stock Analysis Report

Boston Properties, Inc. (BXP): Free Stock Analysis Report

Ashford Hospitality Prime, Inc. (AHP): Free Stock Analysis Report

CubeSmart (CUBE): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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